Europe: Steel demand likely to drop marginally y-o-y in CY22

European Union's (EU) apparent steel consumption is likely to drop marginally by 1% y-o-y to 147 million tonnes (mnt) in CY22, as per the European Iron and Steel Association (Eurofel).

The apparent consumption rose by 6.5% y-o-y to 37.1 mnt in Q1CY22. However, the same fell 5.9% y-o-y in Q2 amid supply chain disruptions, high energy costs and Russia-Ukraine crisis. It is anticipated that demand will remain under pressure in the second half of the year.

European steel major ArcelorMittal (AM) has cut production at some of its steel works including Dunkirk steel works in France as a result of slow demand in the domestic market. In addition, German steel maker ThyssenKrupp's output was also impacted by weak demand and supply chain disruptions.

In July, ArcelorMittal decided to raise steel prices due to decline in profits but it was not supported by cheaper imported prices.

Steel imports to EU remained high despite of fall in exports from major steel exporting countries such as Russia and Ukraine. Also, prices of hot-rolled coils (HRCs) declined by Euro 50/t ($50/t) to Euro 770-830/t ($767-827/t) in North Europe in mid-August, as per London-based steel media outlet.

Outlook
The domestic steel demand is expected to recover as the holidays are over, but it is difficult to reach the levels seen in H1.

Note: This article has been written in accordance with an article exchange agreement between Japan Metal Daily and SteelMint.